NCLT Kolkata: Electricity Must Continue at Corporate Debtor’s Plant During Auction to Maximise Asset Value
Pranav B Prem
The Kolkata Bench of the National Company Law Tribunal (NCLT), comprising Rekha Kantilal Shah (Technical Member) and Labh Singh (Judicial Member), has held that electricity supply cannot be disconnected at the Corporate Debtor’s plant while its assets are being auctioned. The Tribunal emphasised that electricity is essential not only for asset upkeep and safety but also to facilitate inspection by potential buyers, thereby maximising asset value during the liquidation process.
The order was passed in an application filed under Section 60(5) of the Insolvency and Bankruptcy Code, 2016, read with Rule 11 of the NCLT Rules, 2016. The application was filed by Mr. Pratim Bayal, Liquidator of Silverton Spinners Limited, seeking restoration of electricity at the company’s plant premises located at Falta Industrial Growth Centre, Sector-4, South 24 Parganas, West Bengal. The electricity had been disconnected by the West Bengal State Electricity Distribution Company Limited (WBSEDCL) from 28 February 2025, despite prior requests by the Liquidator to continue supply.
The Applicant informed the Tribunal that the Corporate Debtor was undergoing liquidation pursuant to an order dated 25 January 2024, following the decision of the Committee of Creditors to liquidate the company. The liquidator was appointed subsequently by the Tribunal. To facilitate the audit, inspection, and auction of machinery and assets, the Liquidator had made several requests to the respondent for a temporary electricity connection. Initially, a temporary supply was ordered for 30 days by the Tribunal on 20 December 2024, but the connection was later discontinued.
The Liquidator submitted that electricity is necessary for carrying out due diligence by prospective bidders, for ensuring the safety of plant machinery, and for maximising the value of the Corporate Debtor’s assets during liquidation. It was also pointed out that suppliers of essential goods and services, including electricity, are obligated to continue such supply to the Corporate Debtor under the provisions of the IBC unless otherwise directed by the Tribunal.
The Tribunal noted that despite notice being served, the Respondent failed to appear or file any reply. The Applicant undertook that any dues arising post-restoration of electricity will be paid immediately upon receipt of the demand. It was also assured that if the Respondent files claims for pre-liquidation dues, such claims would be processed under Section 53 of the IBC. Additionally, dues relating to the CIRP period beginning from 8 November 2019 would be treated as CIRP costs and paid in priority.
The Tribunal observed: “Restoration of electricity is essential to ensure the safety and upkeep of the machinery and assets of the Corporate Debtor... and also to facilitate the inspection of said assets by the bidders... It is a basic necessity and essential service to ensure the upkeep of assets and also would in turn support in maximising the value of assets.”
In light of these observations, the Tribunal directed WBSEDCL to forthwith restore the temporary electricity connection for lighting at the Corporate Debtor’s plant premises. The Liquidator was also directed to ensure timely payment of electricity dues once supply is restored and to process any claims filed by the Respondent in accordance with the IBC. Accordingly, the application was disposed of on 8 July 2025.
Appearance
For Liquidator: Mr. Shaunak Mitra , Ms. Namrrataa Basu, Advocates, Mr. Pratim Bayal, Liquidator
Cause Title: Mr. Pratim Bayal V. West Bengal State Electricity Distribution Company Limited
Case No: I.A (IBC) No 617/KB/2025 In C.P (IBC) No 522/KB/2018
Coram: Rekha Kantilal Shah [Technical Member], Labh Singh [Judicial Member]
